a.
b.
c.
d.
CCA BATCH 12 REVIEWER
I. COST CONCEPTS
1. A company manufactures several different
products. Unit costs associated with Product
AB are as follows:
Direct materials
Direct manufacturing labor
Variable manufacturing overhead
Fixed manufacturing overhead
Sales commissions (2% of sales)
Administrative salaries
Total
P 60
10
18
32
4
16
P140
What are the fixed costs per unit associated with
Product AB?
a. P32
b. P48
c. P52
d. P102
2. Financial statements are primarily used for
reporting to:
a. Company managers
b. Stockholders and investors
c. Lenders and creditors
d. External parties
3. A company manufactures several different
products. Unit costs associated with Product
AB are as follows:
Direct materials
P 60
Direct manufacturing labor
10
Variable manufacturing overhead 18
Fixed manufacturing overhead
32
Sales commissions (2% of sales)
4
Administrative salaries
16
Total
P140
What are the variable costs per unit associated
with Product AB?
a.
b.
c.
d.
P18
P22
P92
P88
4. Developments in the manufacturing
processes will likely result to
Increase in direct labor
Decrease in direct labor
Increase in direct materials
Decrease in direct materials
5. Within the relevant range, if there is a
change in the level of the cost driver, then:
a. total fixed costs will change and total
variable costs will remain the same
b. total fixed costs and total variable costs
will remain the same
c. total fixed costs and total variable costs
will change
d. total fixed costs will remain the same and
total variable costs will change
6. Management accountants would not
a. Decide on implementation of financial
budgets
b. Be involved in setting product selling
prices
c. Help in the design of information systems
d. Assist in budget planning and monitoring
7. A company manufactures several different
products. Unit costs associated with Product
CD are as follows:
Direct materials
P 50
Direct labor
8
Variable manufacturing overhead 10
Fixed manufacturing overhead
23
Sales commissions (2% of sales)
5
Administrative salaries
9
Total
P105
What are the fixed costs per unit associated with
Product CD?
a.
b.
c.
d.
P44
P35
P23
P32
8. Which of the following is a mixed cost?
a.
b.
c.
d.
manager's salary
monthly rent payment
monthly electric bill
direct materials
9. Management accounting is also called
a.
b.
c.
d.
Managerial accounting
Analytical reporting
Financial accounting
Cost accounting
10. Indirect labor is a
I. Prime cost
II. Conversion cost
a.
b.
c.
d.
I only
II only
Both I and II
Neither I nor II
11. Direct labor cost is a
I. Prime cost
II. Conversion cost
a.
b.
c.
d.
I only
II only
Both I and II
Neither I nor II
12. At a plant where a union agreement sets
annual salaries and conditions, annual labor
costs usually:
a. are considered a variable cost
b. are considered a fixed cost
c. depend on the scheduling of production
runs
d. depend on the scheduling of floor
workers
13. Commissions from sales are classified as
a.
b.
c.
d.
Prime costs
Conversion costs
Period costs
Product costs
14. Direct materials cost is a
I. Prime cost
II. Conversion cost
a.
b.
c.
d.
I only
II only
Both I and II
Neither I nor II
15. Which of the following would be least likely
to be a cost driver for a company's human
resource costs?
a. the number of employees in the human
resource department
b. the number of job applications
processed
c. the number of units sold
d. the square footage of the office space
used
by
the
human
resource
department
16. Variable costs:
a. are always indirect costs
b. increase in total when the actual level of
activity increases
c. include most personnel costs and
depreciation on machinery
d. can always be traced directly to the cost
object
17. A band of normal activity or volume in which
specific
cost-volume
relationships
are
maintained is referred to as the:
a.
b.
c.
d.
relevant range
average range
cost-allocation range
cost driver range
18. A mixed cost is
a.
b.
c.
d.
a fixed cost
always an indirect cost
a variable cost
a cost with fixed and variable elements
19. If each motorcycle requires a belt that costs
P400 and 50,000 motorcycles are produced for
the month, the total cost for belts is:
a. considered to be an indirect fixed cost
b. considered to be an indirect variable
cost
c. considered to be a direct variable cost
d. considered to be a direct fixed cost
20. An understanding of the underlying
behavior of costs helps in all of the following
except
a. costs can be better estimated as volume
expands and contracts
b. process inefficiencies can be better
identified and as a result improved
c. true costs can be better evaluated
d. sales volume can be better estimated
II.
JOB ORDER COSTING
1. Cost behavior refers to:
a. classifying costs as either inventoriable or
period costs
b. how costs react to a change in the level
of activity
c. whether a cost is incurred in a
manufacturing,
merchandising,
or
service company
d. whether a particular expense has been
ethically incurred
2. Which of the following is a mixed cost?
a.
b.
c.
d.
Monthly rent payment
Monthly electric bill
Manager’s salary
Direct materials
3. Cost of raw materials are debited to Raw
Materials Inventory when
a.
b.
c.
d.
Materials are put into production
The materials are ordered
The materials are received
The bill for the materials are paid
4. In a job order costing system, payroll taxes
deductions paid by the employer for
factory employees are normally accounted
for as
a.
b.
c.
d.
Indirect labor
Factory overhead
Administrative cost
Direct labor
5. Under an effective system of internal
control, the authorization for issuing
materials is made
a. Orally
b. By
anyone
on
the
purchasing
department
c. On a prenumbered materials requisition
slip
d. By the accounting department
6. A ________ is a grouping of individual
indirect cost items.
a.
b.
c.
d.
Cost allocation base
Cost assignment
Job order costing system
Cost pool
7. Payment of the factory rent increases the
I. Work-in-Process Control account
II. Manufacturing Overhead Control account
a.
b.
c.
d.
I only
II only
Both I and II
Neither I nor II
8. Commissions from sales are classified as
a.
b.
c.
d.
Prime costs
Period costs
Conversion costs
Product costs
9. Management accounting
generally prepared for
a.
b.
c.
d.
reports
are
Managers
Creditors
Stockholders
Government regulators
10. ________ is the process of distributing indirect
costs to products.
a.
b.
c.
d.
Job cost recording
Cost allocation
Cost pooling
Cost tracing
11. The cost of goods available for sale in an
accounting period is
a. Equal to the beginning inventory of
finished goods
b. Equal
to
the
cost
of
goods
manufactured during the period less the
ending inventory of finished goods
c. Equal
to
the
cost
of
goods
manufactured during the period
d. The sum of the beginning inventory of
finished goods and the cost of goods
manufactured during the period
12. When direct materials are requisitioned, the
________ account is increased.
a.
b.
c.
d.
Accounts payable control
Work-in-process control
Manufacturing overhead control
Materials control
13. All of the following are general ledger
accounts EXCEPT:
a. the Advertising Costs account
b. the Salaries Payable Control account
c. the Accounts Receivable subsidiary
account for Manila Electric Company
d. the Prepaid Insurance Control account
14. A company manufactures several different
products. Unit costs associated with Product
AB are as follows:
Direct materials
P 60
Direct manufacturing labor
10
Variable manufacturing overhead 18
Fixed manufacturing overhead
32
Sales commissions (2% of sales)
4
Administrative salaries
16
Total
P140
What are the variable costs per unit associated
with Product AB?
a.
b.
c.
d.
P88
P92
P22
P18
15. Financial reports for internal purposes must
be communicated
a.
b.
c.
d.
Monthly
Annually
As needed
Weekly
16. Each indirect-cost pool of a manufacturing
firm:
a.
b.
c.
d.
utilizes a separate cost-allocation rate
is a subset of total indirect costs
relates to one cost object
all of the above
17. Which of the following would be least likely
to be a cost driver for a company's human
resource costs?
a. the number of job applications
processed
b. the number of units sold
c. the square footage of the office space
used
by
the
human
resource
department
d. the number of employees in the human
resource department
18. All of the following are true of plant utility
costs EXCEPT:
a. it is an indirect cost
b. the cost increases the Manufacturing
Overhead Control account
c. the cost increases the Work-in-Process
Control account
d. the source document is the utility bill
19. What accounts would be debited and
credited when the wages for indirect
laborers are recorded?
a. Debit Work in process ; Credit Payroll
b. Debit Factory overhead ; Credit Payroll
c. Debit Factory overhead ; Credit Wages
payable
d. Debit Payroll ; Credit Accrued payroll
20. For a given job the direct costs associated
with
the
job
are:
I. Actual overhead
II. Direct material
III. Direct manufacturing labor
a.
b.
c.
d.
I and II only
II and III only
I, II and III
I and III only
PROCESS COSTING
1. Financial reports for internal purposes must
be communicated
a.
b.
c.
d.
As needed
Weekly
Monthly
Annually
4. Which of the following is true of abnormal
spoilage?
2. Dustin Plastics, Inc., manufactures plastic
moldings for car seats. Its costing system
utilizes two cost categories, direct materials
and conversion costs. Each product must
pass
through
Department
A
and
Department B. Direct materials are added
at the beginning of production. Conversion
costs are allocated evenly throughout
production.
Data for Department
February 2022 are:
A
for
Work in process, beginning 200 units
inventory, 40% converted
Units started during February
600 units
Work in process, ending inventory 100 units
Costs for Department
February 2022 are:
A
for
Work in process, beginning
inventory:
Direct materials
P200,000
Conversion costs
P200,000
Direct materials costs added
P2,000,000
during February
Conversion costs added during
P2,500,000
February
How many units were completed and
transferred out of Department A during
February?
a.
b.
c.
d.
b. a cost object should be a product and
not a department or a geographic
territory
c. cost allocation assigns direct costs
d. cost-allocation base can be either
financial or nonfinancial
100 units
700 units
600 units
800 units
3. In a costing system:
a. cost tracing allocates indirect costs
a. It is normally treated as a product cost.
b. It is prorated between cost of goods sold
and inventory.
c. It is normally treated as a period cost.
d. It is considered to be part of production.
5. Which statements are correct? Conversion
costs:
I. include all the factors of production
II. include direct labor and overhead
III. in process costing are usually considered
to be added evenly throughout the
production process
a.
b.
c.
d.
I and II only
I and III only
II and III only
I, II and III
6. The most likely cost driver of distribution
costs is the:
a.
b.
c.
d.
number of production hours
number of parts within the product
number of products manufactured
number of miles driven
7. An example of a business which would
have no beginning or ending inventory but
which could use process costing to
compute unit costs would be a:
a. manufacturer of custom houses
b. corporation whose sole business activity
is processing the customer deposits of
several banks
c. manufacturer of large TVs
d. clothing manufacturer
8. Which of the following products would most
likely be accounted for with a process
costing system?
a.
b.
c.
d.
A public accounting firm
Gasoline refinery
Airplane manufacture
A retailer
9. In a process-costing system, the calculation
of equivalent units is used for calculating:
I. the dollar amount of ending inventory
II. the dollar amount of the cost of goods
sold for the accounting period
III. the dollar cost of a particular job
a.
b.
c.
d.
I and II only
I and III only
II and III only
I, II and III
10. In a process-costing system, average unit
costs
are
calculated
a. by multiplying total costs in a given
accounting period by total units
produced in that period.
b. by dividing total costs in a given
accounting period by units started in that
period.
c. by multiplying total costs in a given
accounting period by units started in that
period.
d. by dividing total costs in a given
accounting period by total units
produced in that period.
11. An understanding of the underlying
behavior of costs helps in all of the following
except
a. process inefficiencies can be better
identified and as a result improved
b. true costs can be better evaluated
c. costs can be better estimated as volume
expands and contracts
d. sales volume can be better estimated
12. A job-cost sheet details the:
a.
b.
c.
d.
actual indirect overhead costs incurred
direct materials purchased and paid
indirect labor costs incurred
direct labor costs incurred
13. Which of the following is a mixed cost?
a.
b.
c.
d.
direct materials
monthly rent payment
monthly electric bill
manager's salary
14. Dustin Plastics, Inc., manufactures plastic
moldings for car seats. Its costing system
utilizes two cost categories, direct materials
and conversion costs. Each product must
pass
through
Department
A
and
Department B. Direct materials are added
at the beginning of production. Conversion
costs are allocated evenly throughout
production.
Data for Department A for February
2022 are:
Work
in
process,
beginning
200 units
inventory, 40% converted
Units started during February
600 units
Work in process, ending inventory
100 units
Costs for Department A for February
2022 are:
Work
in
process,
beginning
inventory:
Direct materials
P200,000
Conversion costs
P200,000
Direct materials costs added during
P2,000,000
February
Conversion costs added during
P2,500,000
February
What is the unit cost per equivalent unit of
beginning inventory in Department A?
a.
b.
c.
d.
P7,500
P2,000
P7,000
P3,500
15. The ending balance in the Work-in-Process
Control account represents the costs of all
jobs that:
a. have not been completed
b. have been completed and sold to
customers
c. have been completed but not sold
d. are reported on the income statement
16. Management accountants would not
a.
b.
c.
d.
Help in the design of information systems
Be involved in setting product selling prices
Assist in budget planning and monitoring
Decide on implementation of financial
budgets
17. Which of the following does not occur with
process costing?
a. Allocation of cost on a period basis.
b. Allocation of cost upon completion of
job.
c. Allocation of cost with regards to stage
of completion.
d. Calculation of equivalent units.
18. Roosevelt Cabinetry, Inc., manufactures
standard sized modular cabinet units for
kitchens and other applications within the
home. Its costing system utilizes two cost
categories, direct materials and conversion
costs. Each product must pass through the
rough cut department and the finish
department. Direct materials are added at
the beginning of production. Conversion
costs are allocated evenly throughout
production.
Data for Finish Department for March
2022 are:
Work
in
process,
beginning
1,000 units
inventory, 25% converted
Units started during the month
1,400 units
Work in process, ending inventory
300 units
Costs for Finish department for
March 2022 are:
Work
in
process,
beginning
inventory:
Direct materials
P300,000
Conversion costs
P200,000
Direct materials costs added during
P420,000
the month
Conversion costs added during the
P1,600,000
month
What is the unit cost per equivalent unit of the
beginning
inventory
in
the
Finishing
Department?
a. P800.00
b. P500.00
c. P1,100.00
d. P300.00
19. A material requisition form normally does
not contain which of the following?
a.
b.
c.
d.
Vendor’s name
Unit cost
Job number
Quantity requisitioned
20. Under the job-cost system, purchases of
direct materials are debited to:
a.
b.
c.
d.
Purchases
Work in Process Control
Factory Overhead Control
None of the above
STANDARD COSTING
1. A variance is
a. the difference between a budgeted
amount and a standard amount
b. the required number of inputs for one
standard output
c. the gap between an actual result and a
benchmark amount
d. the difference between an actual result
and a budgeted amount
2. If each motorcycle requires a belt that costs
P400 and 50,000 motorcycles are produced
for the month, the total cost for belts is:
a. considered to be an indirect variable
cost
b. considered to be a direct variable cost
c. considered to be a direct fixed cost
d. considered to be an indirect fixed cost
3. The unit cost of a product, under job order
costing, can be determined only
a.
b.
c.
d.
At the end of the manufacturing process
At the end of the month
Upon completion of a job
At the point of time
4. Million Colors, Inc. uses standard costing
system in the manufacture of its single
product. The 35,000 units of direct materials
in inventory were purchased for P105,000,
and two units of direct materials are
required to produce one unit of final
product. In November, the company
produced 12,000 units of product. The
standard allowed for materials was P60,000
and then unfavorable quantity variance
was P2,500.
Million Colors’ direct materials used to produce
the November output totaled
a.
b.
c.
d.
12,500 units
25,000 units
12,000 units
23,000 units
5. Design of an ABC system requires:
a. that a cause-and-effect relationship
exists between resource costs and
individual activities
b. requires the accurate application of a
plant-wide manufacturing overhead
rate.
c. an adjustment to product mix
d. that the job bid process be redesigned
6. A single indirect-cost rate may distort
product
costs
because:
a. it recognizes specific activities that are
required to produce a product
b. it fails to measure the correct amount of
total costs
c. costs are not consistently recorded
d. there is an assumption that all support
activities affect all products
7. Yola Co. manufactures one product with a
standard direct manufacturing labor cost of
four hours at P12.00 per hour. During June,
1,000 units were produced using 4,100 hours
at P12.20 per hour. The unfavorable direct
labor efficiency variance was
a.
b.
c.
d.
P1,220
P 820
P1,200
P 400
8. Garland Company uses a standard cost
system. The standard for each finished unit
of product allows for 3 pounds of plastic at
P0.72 per pound. During December,
Garland bought 4,50 pounds of plastic at
P0.75 per pound, and used 4,100 pounds in
the production of 1,300 finished units of
product. What is the materials purchase
price variance for the month of December?
a.
b.
c.
d.
117 U
123 U
150 U
135 U
9. Which of the following is not classified as
factory overhead?
a. Indirect labor
b. Indirect materials
c. Direct materials
d. Depreciation
equipment
on
manufacturing
10. Which of the following production
operations would be most likely to employ
a process cost system?
a.
b.
c.
d.
Homebuilder
Aircraft manufacturer
Shipbuilder
Bottler of mineral water
11. Joint costs are
a. Present throughout the production
process of joint products.
b. Common costs
c. Composed of direct materials, direct
labor, and direct factory overhead
d. Indivisible
12. Million Colors, Inc. uses standard costing
system in the manufacture of its single
product. The 35,000 units of direct materials
in inventory were purchased for P105,000,
and two units of direct materials are
required to produce one unit of final
product. In November, the company
produced 12,000 units of product. The
standard allowed for materials was P60,000
and then unfavorable quantity variance
was P2,500.
Million Colors’ direct materials price variance for
the units used in November was
a.
b.
c.
d.
2,500 U
3,500 U
11,000 U
12,500 U
13. The following were among Gage Co.’s 2014
costs:
Normal spoilage
P 5,000
Freight out
10,000
Excess of actual manufacturing costs
20,000
over standard costs
Standard manufacturing costs
100,000
Actual prime manufacturing costs
80,000
Gage’s 2014 actual manufacturing overhead
was
a.
b.
c.
d.
P120,000
P 55,000
P 40,000
P 45,000
14. An example of a business which would
have no beginning or ending inventory but
which could use process costing to
compute unit costs would be a:
a. manufacturer of custom houses
b. corporation whose sole business activity
is processing the customer deposits of
several banks
c. clothing manufacturer
d. manufacturer of large TVs
15. The standard direct material cost to
produce a unit of Lem is four meters of
material at P2.50 per meter. During May of
the current year, 4,200 meters of material
costing P10,080 were purchased and used
to produce 1,000 units of Lem. What was the
material price variance for May?
a.
b.
c.
d.
P 80 unfavorable
P400 favorable
P480 unfavorable
P400 favorable
16. Million Colors, Inc. uses standard costing
system in the manufacture of its single
product. The 35,000 units of direct materials
in inventory were purchased for P105,000,
and two units of direct materials are
required to produce one unit of final
product. In November, the company
produced 12,000 units of product. The
standard allowed for materials was P60,000
and then unfavorable quantity variance
was P2,500.
What is Million Colors’ standard price for one
unit of direct materials?
a.
b.
c.
d.
5.00
2.00
3.00
2.50
17. A job order cost sheet normally does not
contain which of the following?
a. Direct labor
b. Applied factory overhead
c. Actual factory overhead
d. Direct materials
18. Carr Co. had an unfavorable materials
usage variance of P900. What amounts of
this variance should be charged to each
department?
Purchasing
P900
Warehousing P 0
Manufacturing P 0
Purchasing
P300
Warehousing P300
Manufacturing P300
Purchasing
P 0
Warehousing P 0
Manufacturing P900
Purchasing
P 0
Warehousing P900
Manufacturing P 0
19. Relative sales value at split-off is used to
a. Allocate separable costs.
b. Allocate joint costs.
c. Determine the break-even point in sales
pesos.
d. Determine relevant costs.
20. Dahl Co. uses a standard costing system in
connection with the manufacture of a “one
size fits all” article of clothing. Each unit of fi
nished product contains two yards of direct
material. However, a 20% direct material
spoilage calculated on input quantities
occurs during the manufacturing process.
The cost of the direct material is P3 per yard.
The standard direct material cost per unit of
finished product is
a.
b.
c.
d.
P4.80
P7.50
P7.20
P6.00